Australia's online advertising spend outgrows traditional media channels

New Frost and Sullivan finds digital advertising expenditure hit $3.74bn in 2013, up 16%, and is expected to continue outperfoming other channels between now and 2018

Australia’s online advertising market represented more than a quarter of total advertising expenditure in 2013 and outperformed all other media channels for the year despite experiencing slower growth.

Frost and Sullivan’s new The Australian Online Advertising Market: Year End Review and Market Outlook report found the country’s online advertising market grew 16 per cent in 2013 to $3.74 billion in revenue, or 27 per cent of total advertising spend. Total advertising spend for last year hit $13.9bn.

Digital advertising was the strongest performer across all types of channels, outpacing traditional media such as print, TV, outdoor and radio, although the pace of growth has slowed over the past decade. For instance, from June 2011 to June 2012 online advertising grew at a rate of 20 per cent, whereas from June 2012 to June 2013 it dropped by 4 per cent.

The leading online advertising segment was search advertising, which increased 23 per cent in 2013, followed by online general advertising, which rose 12 per cent. Online classifieds chalked up 11 per cent growth, while online directories grew by 4 per cent. Search is expected to continue to outperform the other three major online segments between now and 2018, Frost and Sullivan stated.

Not surprisingly, the fastest growing segments in the Australian online advertising market are mobile and online video, and both are expected to outperform the market significantly over the next five years. Mobile advertising, for example, is forecast to grow at a Compound Annual Growth Rate ( (CAGR) of 39 per cent between 2013 and 2018, while video advertising is expected to grow at 31 per cent.

By that time, the research group claims 70 per cent of overall advertising served on mobile devices will be to tablets. The prediction echoes the last quarterly online advertising expenditure report from the Interactive Advertising Bureau (IAB), which showed tablets representing just under half of the mobile device category.

Frost and Sullivan also noted Australia’s total advertising market is experiencing slower than average growth in 2013, a reflection of the overall below par growth of the local economy.

Given the short-term economic outlook for Australia is still uncertain, Frost and Sullivan said it expects overall advertising expenditure in FY2014 to remain relatively flat, and offered up a CAGR prediction of 2.8 per cent between 2013 and 2018 to $16bn.

“Online advertising expenditure is forecast to significantly outperform the more mature offline advertising channels [free-to-air TV, pay TV, radio, magazines, outdoor, cinema and print directories] over the next five years, with a CAGR of 12 per cent, increasing to $6.59 billion, its proportion accounting for 41 per cent of the total advertising market in 2018,” senior research manager, Australia and New Zealand ICT practice, Phil Harpur, commented.

“Strong increases in spending intentions for 2014 are predicted by advertisers across all online general advertising products, in particular for online display and email campaigns.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, or join us on Facebook: https://www.facebook.com/CMOAustralia

Signup to CMO’s new email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

5 cornerstones of a strong digital culture

Creating a strong company culture may sound like a daunting task, but it’s actually pretty straightforward. In fact, company culture is created in exactly the same fashion as a religion or democracy. Behaviours created from the organisation’s inception are reinforced over time by leadership, attracting like-minded people and eventually reaching critical mass to become an accepted ‘truth’.

Anthony Stevens

Founder and CEO, Digital Asset Ventures

Should you rebuild your company’s tech stack in blockchain?

The question I get asked most regularly these days is: ‘Do I need to rebuild my company’s systems on Blockchain?’ And the answer, every time, is ‘No, you’re asking the wrong question’.

Michelle O'Keeffe

CEO, Engaging.io

Customer value proposition: Getting the brand promise to your customers right

Throughout my career, I have witnessed a litany of brand names that profess to have a unique customer value proposition (CVP). In reality, however, they’ve had little more than a ‘value proposition’: A simple list of benefits applied to a general audience.

Ric Navarro

Global director of marketing and communications, Norman, Disney & Young

Hi there! Thanks for this interesting article! I love to read about new technology and software that makes our lives easier. I'm looking ...

Julia Summer

Wartsila overhauls Web platforms to create ‘seamless’ brand experience across all devices

Read more

RE: Sales and marketing SLAs, often the choke point isn't the teams but them getting the data into the tools they want to use with the da...

Ed Fry

Why sales and marketing alignment is more important than ever

Read more

Thank you for the good and very helpful information. It is very interesting. I love all the things you share and see your beautiful creat...

รัตนาวดี ภูมิวรรณ

Former eHarmony marketing chief joins telco startup

Read more

Colin Kaepernick, not Mike Kapernick.

thisisw

Zenith's innovation leader: Mid-digital age not benefitting media, brands or consumers

Read more

AGA KHAN HOSPITAL is in need of kidney donors for the sum of 2 crore, Contact us today if you want to sell your kidney for money, and thi...

Sebastian Friedrich

Mindshare gets behind blockchain advertising alliance

Read more

Latest Podcast

More podcasts

Sign in